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Decision Between Decentralized and Centralized Operations

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As an IHRM director, would you prefer to have your operations centralized or decentralized? Why?

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Organization structure has a profound impact on the bottom line. Suitable organization structure acts as a catalyst to the growth of the business. Thus the management should create an appropriate fit between the strategy and the organization structure. Centralization it is generally an authority relationship between those in overall control of the organization and rest of the staff. The tighter the control exerted at the center, the greater the degree of centralization. The benefit of the centralization is that top managers remain fully aware ...

Solution Summary

This solution looks at the importance of organization structure on the bottom line and also how centralization and decentralization is more important for different-sized businesses.

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Human Resources Management: Management Models

You have been the manager of human resources for a firm headquartered in the United States for many years. The firm has divisions all over the United States, as well as overseas. A new chief executive officer (CEO) has just come on board after receiving his master's degree in business from an ivy-league institution. He has great academic credentials but little work experience. The management model that the former CEO preferred was more formal and autocratic, with most decision making being centralized to a great degree. Some of the firm's challenges include the following:

- The firm expects to be in a much more competitive environment in the future.
- To add to this, there has been talk about the possibility of employees forming a union because of the way they were treated under the former CEO.
- The overseas divisions, where a much higher growth potential is expected, have repeatedly complained about the time it takes to have decisions made by the staff that is headquartered in the United States. On the other hand, there have been times where the international divisions have made decisions that are at odds with the company's overall strategy.

Management models to discuss are as follows:
- The use of an autocratic versus a participative management style toward decision making
- Having a more centralized versus a more decentralized decision making
- Adopting a more informal versus a more formal management style

Search for articles that deal with actual examples of each of the 3 management models regarding the management of the employees in this firm.

Explain why that particular model of management was chosen by the senior management in the article that you researched. In your opinion, was this approach toward management a success? Why or why not?

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